Which of the following must be true about homothetic tastes:
A) Utility functions that represent those tastes are homogeneous of degree 1.
B) There exists a utility function that represents those tastes and is homogeneous of degree 1.
C) There exists a utility function that represents those tastes such that the expenditure function is homogeneous of degree 1.
D) The indirect utility function is homogeneous of degree zero.
E) Both (a) and (c) .
F) Both (b) and (c) .
G) Both (b) and (d)
H) None of the above.
Correct Answer:
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